U.S. stocks drop on Google earnings miss; Spanish bonds advance

U.S. stocks fell for the first time in four days after Google Inc. reported lower-than-estimated earnings. The yen weakened, while Spain’s bonds rose as the nation raised more than planned at a debt sale.

The Standard & Poor’s 500 Index lost 0.2 percent to 1,457.37 at 4 p.m. in New York, as Google Inc. sank 8 percent. Spanish 10-year yields fell 12 basis points to 5.34 percent. The yen dropped against most of its major counterparts. Gold futures retreated, while soybeans increased the most in five weeks. Ten-year Treasury yields held at 1.83 percent.

Google reported profit excluding some items of $9.03 a share, according to a filing that was inadvertently filed during regular trading, trailing the average analyst estimate of $10.65 a share. U.S. jobless claims rose more than forecast last week. Spain sold a combined 4.61 billion euros ($6 billion) of securities due in 2015, 2016 and 2022, the Bank of Spain said, compared with a maximum target of 4.5 billion euros.

“Google failed to meet expectations,” Giri Cherukuri, a portfolio manager for Oakbrook Investments LLC, which manages $3 billion, said in a telephone interview. “Google is a big company, and on top of the fact that they missed estimates, they talked about advertising in the online world not doing as well as previously thought.”

Google Earnings

Trading in Google’s stock was halted at about 12:50 p.m. New York time, and resumed at 3:20 p.m. after the company released a finalized version of its earnings document. The results showed its tools are becoming less valuable to advertisers while costs associated with expansion into new businesses are chipping away at profitability.

The Nasdaq Composite Index lost 1 percent to 3,072.87, while the Dow Jones Industrial Average fell 0.1 percent to 13,549.48. Philip Morris International Inc., the world’s largest publicly traded tobacco company, dropped 4.2 percent as earnings trailed analysts’ estimates. Morgan Stanley slipped 3.8 percent after reporting a loss for the third quarter. Travelers Cos. gained 3.6 percent as earnings more than doubled on lower claims costs tied to natural disasters.

Jobless claims increased by 46,000 to 388,000 in the week ended Oct. 13, Labor Department figures showed. The median forecast of 49 economists surveyed by Bloomberg called for a rise in claims to 365,000. The typical pattern of large increases in unadjusted claims at the start of the quarter seems to have shifted by a week in one state, causing the adjusted data to become volatile, a Labor Department spokesman said.